The federal government is boosting the minimum down payment for higher-priced homes in Canada effective in the new year.
Homebuyers are currently required to put down a minimum of five per cent to qualify for Canada Mortgage and Housing Corporation insurance ? protection that lenders insist on when providing a mortgage worth more than 80 per cent of the home's value.
Starting in February, CMHC will require a 10 per cent down payment on the portion of any mortgage it insures over $500,000. The five per cent rule remains the same for the portion up to $500,000.
"We recognize that, specifically in the Toronto and Vancouver markets, we have seen house prices that have been elevated," Finance Minister Bill Morneau told reporters on Friday, "and we want to make sure we create an environment that protects the people buying homes so they have sufficient equity in their home."